Gap Admits Possible Child Labor Problem

The multi-billion dollar global fashion company Gap has admitted that it may have unknowingly used child labor in the production of a line of children's clothing in India.

This followed allegations by an investigative reporter based in Delhi, whose story was splashed across two pages of the British paper The Observer on Sunday.

ABC News obtained some of the video material he used to substantiate his story. It shows children who appeared to be between the ages of 10 and 13, stitching embroidered shirts in a crowded, dimly lit work-room. The video clearly shows a Gap label on the back of each garment.

The reporter, Dan McDougall, said the children were working without pay as virtual slaves in filthy conditions, with a single, backed-up latrine and bowls of rice covered with flies. They slept on the roof, he said.

Gap Inc. was quick to order a full investigation into the allegations and to re-iterate its policy never to use child labor in the production of its clothes.

"This is completely unacceptable and we do not ever, ever condone any child laborer making our garments," said the president of Gap North America, Martha Hansen, on ABC News' "Good Morning America Weekend Edition" on Sunday morning.

"We act swiftly," Hansen went on. "And quite honestly, I'm very grateful that this was brought to our attention."

McDougall said the children seen working on the Gap clothing all came from the poor Indian state of Bihar, a favourite hunting ground for traffickers looking for cheap underage labor. Impoverished parents are tricked into selling their children for a few dollars with the empty promise that they will be well cared for and will send back their wages.

"They had been trafficked by train," he said. "Its nickname is 'the child labor express.' At any time, you can see 80 children on this huge train. Most are trafficked to work in the garment industry, which is huge in New Delhi."

Like many international companies, Gap Inc farms out huge production orders to subcontractors in the developing world, where child labor is virtually endemic. The company takes pride in its record of ethical out-sourcing and has almost 100 inspectors monitoring 2,700 factories worldwide, it says. But in India one of its suppliers evidently broke the rules.

"One of our vendors did obviously, in subcontracting the product, did not ensure that this product was not going to be made with child labor," said Dan Henkle, Gap's senior vice president for "social responsibility." "It's completely against out policies. We are bringing all of our suppliers together in the region to reiterate once again that this is completely unacceptable."

But in India, more than 20 percent of the economy is dependent on the labor of children, according to one estimate. Save the Children says that as many as 80 million children are working in India, which is known as "the child labor capital of the world."

"The problem of child labor is huge in India," Shireen Vakil Miller of Save the Children told ABC News' Nick Schifrin in Delhi. "Often, you can't see it because it's hidden, whether in people's homes or ... crammed into little rooms. ... They will be faced with very cramped conditions, maybe 10-15 children to a room, work for long hours, and doing very detailed work, and often will be hit, will be yelled at, their food may be withdrawn if they haven't done something well enough.

"They don't grow as they ought to grow," Miller added. "Their eyes suffer. Their hands suffer. The conditions are terrible."

Technically, child labor is against the law in India.

"It's illegal for children to work in factories in India [and] in a range of other hazardous industries," said Sama Coursen-Neff of Human Rights Watch. "But unfortunately, the government has lacked the political will to enforce its own labor laws. Many children are working in horrific conditions, including those that amount to slavery."

This is not the first time that an American company has been accused of using child labor, inadvertently or otherwise, through its third-world suppliers. Ten years ago, a human rights group charged that a clothing line owned by TV personality Kathie Lee Gifford and sold at Wal-Mart was produced by children in sweatshops. Gifford later became a crusader against the use of child labor.

Today, while Gap Inc. continues its own investigation, it has already ensured that the garments made by the children from Bihar will never be sold in its stores. The order has been pulled, and the clothes destroyed.